Property values up, tax appeals down
Kootenai County property values and taxes continue to climb, yet the rate of property tax appeals is going down.
The Kootenai County Assessor’s Office took action on 28 fewer appeals in 2020 than 2019. Commissioner Leslie Duncan said she believed there were two main factors to the number of appeals, the first being an increased level of understanding about the property assessments and the appeal process, the second is the public recognition of the booming real estate market.
“There is a third factor however that may have played into this year and that is the coronavirus situation,” Duncan said. “The assessor received, I believe, over 300 calls so in spite of the coronavirus, people did inquire about appeals.”
Nancy Jones, Kootenai County commissioners communication manager, said property tax appeals have been on a downward trend since the recession in 2008.
“When I first started as a clerk (in 2013) it was over 300,” she said. “During the recession it was over 800.”
Of the 104 appeals Kootenai County Assessor Béla Kovács and the Board of Equalization reviewed this year, the BOE recommended changes to two, and nine received recommended changes by the assessor. The three county commissioners are the Board of Equalization. Public records do not release information about appeal winners.
Assessors evaluate more than 90,000 Kootenai County properties through a five-year cycle, reviewing different areas every year. According to the assessor’s informational pamphlet, value is determined in part by a property’s physical characteristics such as square footage, additions, number of bedrooms, bathrooms, and amenities like swimming pools and fireplaces. Properties that generate income, are additionally assessed by the amount of revenue it produces. Location is also a key characteristic affecting value.
After property tax assessments were sent out in May, Kootenai County residents had until June 22 to file an appeal at no personal cost. The BOE heard assessment appeals from June 22 to July 22.
According to data from the Kootenai County Assessor’s Office, the likelihood of lowering an assessment was less than 10% this year. As part of the appeal process, property owners must provide fact-based evidence their assessment is incorrect. Similar to a quasi-judicial system, the appellant, county assessor, and BOE have 10 minutes each to argue for or against the assessment. Examples of this could be a decrease in the number of bathrooms, a decrease in the size of a property, or if a property was damaged by a fire or a flood.
The most common cause for a property value to change is a fluctuation in the market.
“I think the primary reason for a decrease in appeals is that people do in fact see the trend,” Commissioner Chris Fillios said. “They know the market values are increasing, and if you look at the overall county it is increasing by 12 to 15% every year.”
According to Kootenai County Finance Director Dena Darrow, the Board of County Commissioners decided to take a 0% increase in property taxes for the 2021 budget. This year, Kootenai County is expecting to collect $51,314,811 in property taxes solely from new growth, up from $49,926,627 in 2019.
While the county is abstaining from a property tax increase, Kootenai’s 44 taxing districts set their own property tax rates, routinely increasing those rates by 3 percent annually. They also are allowed to capture tax money created by construction growth.
Residents’ property can be taxed by four to 10 of these districts including cities, school districts, highway districts and North Idaho College. While the county may increase taxes 0%, property owners’ tax rates will still go up.
For the “hot market” neighborhood that is Kootenai County, the appreciation in property values is not directly proportional to tax increases but more so to market sales. This drives the market value of homes in desirable neighborhoods to rise annually by double digits.
According to Kovács, Kootenai County property values increased by roughly 9% in 2017. Neighborhood values in southern and eastern areas of the county rose less than those in the western and northern regions of the county. Real estate markets in Coeur d’Alene, Post Falls and Hayden have experienced greater levels of appreciation than others.
“Everybody knows we have a hot real estate market with prices going up. I dare you to find someone in the county who says they aren’t paying too much for their house,” Kootenai County Commissioner Bill Brooks said. “Frankly, Kootenai County is being pumped up by out-of-state people buying up all our housing.”
